This depends on your target users. If they only live in the Netherlands for example you have to target different devices than USA or China.
Testing on a few devices across the dimensions (resolution, dpi, cpu, manufacterer, keyboard[less]) then you are pretty save.
But I have experience where we tested on a range of devices, but the app still had problems on 1 or 2 specific devices such as the sony ericsson xperia mini.
So if you have the money I would recommend something like testdroid to be increase your testing confidence.
I have a very crappy 99$ android phone[1] with gingerbread, a Nexus S, a Nexus 4 and a Nexus 7. Everything is tested on all the devices to make sure it works. I think that with this devices I can catch pretty much all cases, from low end to high and tablets.
my principal app is an Imgur(image hosting) Gallery viewer so I'd say mostly young people that do a good usage of social networks & media so people that usually "keep up with the technology".
In fact my usage statistics are the following:
Android 4.0.3 - 4.0.4
29.55%
Android 4.1
28.99%
Android 2.3.3 - 2.3.7
28.37%
while for the rest of the app in the entertainment category the is the following:
Android 4.0.3 - 4.0.4
29.76%
Android 4.1
15.31%
Android 2.3.3 - 2.3.7
40.07%
you can really see a difference but 2.x is still quite strong everywhere so it's usually worth to have some kind of support, even if the app doesn't run greatly users will generally acknowledge that they have a crappy device and not complain, for instance I' d say that 100% of support requests are from users with high end devices.
Any one you can get your hand on that gives you both a large and small screen (eg a Galaxy S3 and an older Sony), as well as one running 2.3 (still very common) and one on 4.2, with anything inbetween a bonus
Testing on a few devices across the dimensions (resolution, dpi, cpu, manufacterer, keyboard[less]) then you are pretty save.
But I have experience where we tested on a range of devices, but the app still had problems on 1 or 2 specific devices such as the sony ericsson xperia mini.
So if you have the money I would recommend something like testdroid to be increase your testing confidence.